Allowable expenditure and section 35B reference questions were refused where facts were settled and precedent already governed the issue.

A contribution made before any trust had actually come into existence was treated as not constituting allowable expenditure, because the finding that no trust had been created on the date of transfer was factual and unchallenged; the reference question on that point was therefore not entertained. The separate issue on deduction under section 35B of the Income-tax Act, 1961 was also held not to give rise to a referable question of law, as it was already covered by binding Division Bench precedent. On both issues, the requests for reference were refused and the reference petitions failed.

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Issues: (i) Whether the contribution made to trustees before any trust had in fact come into existence could be treated as allowable expenditure and thus give rise to a referable question of law. (ii) Whether the question relating to deduction under section 35B of the Income-tax Act, 1961 was a referable question of law in view of binding precedent.

Issue (i): Whether the contribution made to trustees before any trust had in fact come into existence could be treated as allowable expenditure and thus give rise to a referable question of law.

Analysis: The finding that no trust had been created on the date of transfer was accepted and remained unchallenged. On that factual basis, the contribution could not be treated as proper or allowable expenditure. The issue was therefore treated as largely factual and not as raising a substantial question of law.

Conclusion: The question did not arise for reference and the claim to treat the contribution as allowable expenditure failed.

Issue (ii): Whether the question relating to deduction under section 35B of the Income-tax Act, 1961 was a referable question of law in view of binding precedent.

Analysis: The point was covered by earlier Division Bench decisions of the same court, and the court found that no referable question of law survived for consideration on this issue.

Conclusion: The question under section 35B was not referable.

Final Conclusion: The requests to direct reference of both questions of law were refused, and the reference petitions failed.

Ratio Decidendi: A question will not be referred where the decisive finding is factual and unchallenged, or where the legal issue is already settled by binding precedent.

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